Who This Helps
This is for the junior analyst who needs to help their founder make calm, clear decisions. It’s part of the Founder Finance Basics Mission Pack, which is all about understanding unit economics, runway, and reporting. If revenue is up but cash is flat, this is your first stop.
Mini Case
Ben’s SaaS company has 6 months of cash left. He’s torn between hiring a salesperson (cost: $10k/month) or doubling marketing spend. His current monthly burn is $50k. A quick runway forecast shows that hiring now would cut his runway to just over 4 months, but the new marketer might pay back in 90 days. The numbers make the priority clear.
Do This Now (5 Steps)
- Grab last month’s bank statement and your P&L.
- Write down your total cash in the bank today.
- List all your fixed monthly costs (rent, salaries, software).
- Add your average variable costs (like ads or commissions).
- Divide your total cash by your total monthly burn. That’s your runway in months. Now you have a number you can explain and act on.
Avoid These Traps
- Don’t mix personal and business accounts—it blurs the real picture.
- Avoid using revenue instead of cash. Cash is king for runway.
- Don’t forget to include upcoming one-time costs, like a tax bill.
- Never assume next month’s costs will be the same as last month’s.
- Resist the urge to use an overly complex model. Simple is actionable.
- Don’t hide the forecast. Share it with your key decision-makers.
- Avoid analysis paralysis. The goal is a good enough number, not a perfect one.
- Never stop updating it. Revisit your forecast every single month.
Your Win by Friday
By Friday, you’ll have one clear number: your runway. You’ll know if you have 6 months to experiment or 6 weeks to cut costs. This turns a vague worry into a concrete game plan. You’ll ship a clean analysis that points directly to the next highest-impact experiment. Go be the calm in the storm.